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Human
Services
At the Center for Tax and Budget Accountability, we know that
fiscal reform is particularly important to human service programs
and providers. CTBA's
analysis shows that, despite increased costs, spending on human
services decreased by $387 million, or 10%, between 2001 and 2004,
after adjusting for inflation. The state has failed to allocate
adequate funding even to maintain necessary human services because
the the Illinois revenue system does not generate enough money to
keep pace with the increased cost of providing services from year to
year. As a result, human service providers are increasingly finding
themselves squeezed from all directions, working with less money
every year while trying to make ends meet in order to adequately
deliver the much-needed human services on which Illinois' low and
moderate income families, seniors and those with disabilities rely.
So, what are human service providers and advocates to do? The answer
is straightforward:
Illinois must modernize its tax
system and bring in more revenue
to maintain funding for human services over time.
Unless comprehensive fiscal reform is
passed, human services will continue to see their funding decrease
year after year. A proposal on the table now that accomplishes
comprehensive fiscal reform, including the elimination of the
structural deficit, is House and Senate Bill 750. HB/SB 750 would
generate additional revenue for the state by expanding the sales tax
base to cover some consumer services (but not business, housing,
professional or healthcare services) and increasing the income tax
from 3% to 5%. HB/SB 750 would also reduce property taxes statewide
and would provide nearly $1 billion in targeted tax relief for low
and moderate income families; this targeted tax relief would ensure
that the bottom 60% of income earners in Illinois would not pay any
more in taxes after the passage of HB/SB 750.
In all, HB/SB 750 would generate more than an additional $9 billion
for the state. This is important for human service providers
particularly because:
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A portion of this would go to
eliminating the state's $2.3 billion structural deficit, and
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$175 million would go to the
creation of a Human Services Cost of Doing Business (CODB)
Trust Fund.
Cost of Doing Business Trust Fund
(CODB)
The creation of the CODB Trust Fund,
which is contingent on the passage of fiscal reform, would do the
following (HB
2253 was filed in 2007):
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Create a CODB Trust Fund. In year
one, $175 million will be deposited in the Fund with new
money generated from state sales tax revenue outlined in HB/SB
750.
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The CODB Fund may be used for a cost
of doing business adjustment annually for purchase of care
contracts and grant agreements. In year one, this would be a
3% cost of doing business increase. In subsequent years,
allowable CODB increases would be determined by the Employment
Cost Index (ECI) so as to accurately reflect inflationary costs
from year to year.
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Eligible Departments include the
Department of Children and Family Services, Department of Human
Services, Department of Public Health, Department of Healthcare
and Family Services, Department on Aging, Office of the Attorney
General, Department of Corrections, Department of Juvenile
Justice, Department of Commerce and Economic Opportunity and
private community-based contractual providers or grantees.
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It is important to note that this is
not an automatic increase for human services. Service providers
would still need to go to Springfield every year to advocate for
their programs. However, the CODB bill would set up a designated
trust fund specifically to be used for cost of doing business
increases the funds available for human services.
Click here to
read the bill.
Click here to read a
fact sheet on HB
2253.
Click here to read a
fact sheet on HB/SB 750.
Click here to read a
fact
sheet on Human Services Funding in Illinois.
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